When it comes to healthcare, Walmart giveth to its customers—and taketh away from its employees.
The retailing giant announced Tuesday that it plans to eliminate health insurance coverage for its part-time US employees who work less than 30 hours a week, while raising insurance premiums across the board for all employees.
At the same time, Walmart said that it plans to offer consumers one-stop shopping, in-store and online, for healthcare insurance.
Neither move is particularly surprising for America’s largest private employer.[more]
The Affordable Care Act requires major employers to offer healthccare insurance to all workers who work at least 30 hours a week, which has prompted similar moves at Target, Walgreens, Trader Joe’s and Home Depot, as noted by Sally Welborn, the retailer’s SVP of global benefits, in a blog post that included the graphic above.
Walmart will discontinue existing coverage on January 1 for part-timers who work less than 30 hours a week, who comprise about 2 percent (or 30,000 people) of the company’s 1.3 million employees. In addition to that nudge, Walmart has been facing generally rising healthcare costs even as it sees stagnation in its store sales and fierce competition from online retailers such as Amazon.
“Like every company, Walmart continues to face rising healthcare costs,” said Welborn. “This year, the expenses were significant and led us to make some tough decisions as we begin our annual enrollment.”
At the same time, Walmart wants to be the nation’s number one consumer healthcare provider. After all, as Forbes notes about its healthcare aspirations, “There are 130 million visits to U.S. hospital emergency departments—per year. Walmart stores get 150 million visitors—per week.”
It’s now working with DirectHealth.com, a health insurance comparison service, to allow shoppers to compare coverage options and enroll in Medicare plans or the public exchange plans created under Obamacare.
Availability of this service in its stores, online and by phone is supposed to help Walmart compete more effectively with drugstore chains that are rapidly adding healthccare services, such as Walgreens’ recent move to extend beyond clinics to become a “wellness coach” to its customers. Walmart already operates primary care clinics in dozens of its stores.
Walmart will launch a two-month ad campaign for its health insurance offering on Oct. 10 under the banner “Healthcare begins here.” The timing isn’t coincidental; as Forbes notes, “the Medicare open enrollment period begins next week, and the open enrollment period for the Affordable Care Act’s health insurance exchanges begins in November.”
On another front where it is expanding the traditional definition of a mass merchandiser, Walmart has been rolling out a new checking product called GoBank, which provides a smartphone-friendly account with California’s Green Dot Bank after a consumer buys a $2.95 “starter kit” at a Walmart.
“There’s a big market—a lot of customers who either can’t get a bank checking account, don’t want it, have a history of overdrafts—and some of those are customers that banks have pushed out the door,” Greg McBride, a personal financial advisor, told the Milwaukee Journal Sentinel.
But that isn’t keeping banks from complaining that Walmart is encroaching on their turf. The Green Dot partnership “is another way of sort of doing an end run around the banking industry, from a perception standpoint,” said Rose Oswalk Poels, CEO of the Wisconsin Bankers Association.
Drawing little objection is another new gambit by Walmart: extending its efforts to devleop a sustainable supply chain. The plan announced this week involves improving access to food, making healthier eating easier to understand, improving the safety and transparency of its supply chain and affordability.
“The future of food is absolutely critical for our both our society and our business,” Walmart CEO Doug McMillon said in a statement. “We’ve learned on our sustainability journey that we’re most successful when your initiatives create social and environmental value and business value at the same time.”
Among other things, Walmart now plans to provide four billion healthier meals to needy consumers in the US over the next five years, nutrition education to four million US households, more information on its labels about its food supply chains, and more work with suppliers to improve water usage and other environmental outcomes.
“It all comes down to trust,” McMillon said. “Customers have to trust us on food. When we focus on food, we are doing right by our customers, our communities, and our planet.”